Political ads boost media profits

NEW YORK — For TV viewers, this cutthroat election year is a riot of attack ads and media saturation made possible by big-money donors; but for TV stations, it's a stimulus package.

THE ASSOCIATED PRESS

NEW YORK — For TV viewers, this cutthroat election year is a riot of attack ads and media saturation made possible by big-money donors. For TV stations, it's a stimulus package.

One research group expects TV political spending to hit a record $3 billion, and the windfall may continue well past Election Day because regular advertisers are getting squeezed out of the schedule and could spend their ad budgets later. Coming out of a recession that put some broadcasters in or near bankruptcy protection, political spending is emerging as a critical — but temporary — source of revenue.

Several factors created the upsurge: tea party enthusiasm, self-financed millionaire candidates, an unusually high number of toss-up races and a Supreme Court decision in January that eased rules on corporate campaign donations.

Ad rates are going up overall because political campaigns are taking up much of the commercial time. Station managers say many regular advertisers aren't able to buy ads now. That frees up money to spend later.

"The money is much stronger than we anticipated, and we thought it would be pretty big," says Chris Bailey, who manages ABC affiliate WOLO in Columbia, S.C. His station is benefiting from a particularly expensive House race, one where Rep. Joe Wilson — famed for his "You lie!" outburst during last year's State of the Union address — is fighting to keep his job.

The Campaign Media Analysis Group, a unit of the consulting firm Kantar Media, projects that spending on political television ads will hit $3 billion this year. Not only would that top a record $2.4 billion spent during the last midterm elections in 2006, but it would also surpass the $2.7 billion spent in 2008, when both congressional and presidential campaigns poured cash into TV ads.

The political boon is showing up across the industry. Political advertising revenue should account for more than 11 percent of the total at local broadcast stations this year, according to Magna Global, a unit of Interpublic Group of Companies that tracks ad spending. That's up from 7 percent in 2006.

The uptick brought by political campaigns is also registering at some of the country's biggest media companies.

CBS Corp., which owns 28 local stations, expects political revenue to hit nearly $200 million this year. Some of that total will come from the company's radio stations and billboards, but the vast majority is TV. CBS hasn't broken out the total during previous elections, but the company says 2010 will be a record.

Not all media are benefiting equally. Newspapers, for instance, get relatively few political ads — and those businesses still make up the bulk of large media companies including Gannett Co. and Tribune Co. And some TV stations fare better than their competitors because of how political parties and candidates are targeting their audiences.

"For the most part, the demographic that campaigns are looking for is 50 years and older, which is not in our wheelhouse, per se," says John Spinola, who manages WFLX in West Palm Beach, Fla. The station is an affiliate of Fox, the network of "The Simpsons" and "Family Guy." Spinola says political advertising has been "very good" but not "over-the-top good."

This despite that fact that WFLX's market is brimming with big-money campaigns. Tea party favorite Allen West is in one of the country's most expensive House races. Then there's the Senate campaign, which became a three-way race when Gov. Charlie Crist gave up on trying to beat tea party favorite Marco Rubio in the GOP primary and ran as an independent. Finally, Rick Scott, the tea party's choice for governor, has a campaign war chest of more than $48 million, most of it from his own wallet.

Another station manager in West Palm Beach, Steve Wasserman of WPTV, says the station will earn more from political ads in 2010 than it did in recent elections.

"When you have a hotly contested governor's race that's too close to call, and then a three-way Senate race besides, it does really get the juices flowing here," he says.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.